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Digitising European Industry

Internet of ManufacturingMuenchen, 7 February 2017

• Dr Max Lemke• Head of Unit Digitising Industry

• European Commission - DG CONNECT#DigitiseEU

Three dimensions of Value Creation from Digitisation

"Digital inside": Innovations in products (all types)

Digital transformations of processes

Radical/disruptive changes in business models

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~40 % AV growth ~50% ~40% ~80%

Products Services

ICT sector

Products Services

ICT sector

The trend

Technologies driving the change

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Digital Transformation

Innovation in products, processes and business

models

AI (autonomous systems)Robotics, automation, machine

learning, self-driving,..

IoT (physical meets digital)Embedded software, sensors,

connectivity, actuators, low power ICT, …

Big data (value from knowledge)Analytics, storage, Cloud HPC,..

Technology value chainsSome examples

Autonomous driving

Micro-electronics

Healthy aging

DIGITISING EUROPEAN INDUSTRYBackground

DIGITISING EUROPEAN INDUSTRYEC Communication

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Governance: Roundtables and Stakeholder Forum

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31 January – 1 February 2017 in Essen, Germany

500 participants from 22 EU Member States

Towards a European Platform of National Initiatives: Adding Value at EU Scale

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EU-level initiative:

Digitising European Industry (COM(2016)180)

National PolicyInitiatives- March 2015: 6- March 2016: +3- March 2017: +4

(estimated)- More to come

Launch of the "Platform of Platforms":Rome 23 March 2017

with 60 years celebrations of the Rome treaty

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Strengthening leadership in key parts of the digital value chain:

Organic growth of Europe's digital innovation infrastructure

Member states & regions: build-up/strengthening of national and regional structures of digital innovation hubs• Innovation programme (e.g. German Mittelstand-Digital, Bayern Innovativ, …)• Structural funds (e.g. ESIF)• Funding programmes (e.g. KfW, EFSI - Juncker Plan)• Regional and urban ecosystems for digital transformation

European Commission: Complementary added-value oriented measures • Map of competences, best practices, demonstrators,…• Pan-European network of Digital Innovation Hubs (DIH) • Support for cross-border innovation experiments • Frameworks for pooling of resources (H2020, COSME, ESIF, EFSI, …) • Preparatory measures for DIHs in less developed regions

Financing – Reaching a leveraging factor of 10 through H2020• 500 M€ for networks of Innovation Hubs in Horizon 2020 5 B€ regional and national funding, including when possible ESIF, EFSI, …

Ensure that any industry in Europe - big or small, wherever situated, whatever sector -

has access to advanced digital technologies and competences

Digital Innovation Hubs:starting position

Variable geometry of the innovation infrastructurein Europe

• Competence Centers andInnovation Hubs

• Sector- andapplication oriented

• Technology oriented

• User oriented

• Location oriented

Netherlands Field Labs

VANGUARD INITIATIVE

European Factories of the Future PPP

Regional Innovation Hubs:

• Digital Hub Cologne• Bayern Innovativ• …

ICT Innovation for Manufacturing SMEs

Started in 2013 110 M€ of EU funding - 11 networks 70 competence centres 280 experiments: 75% cross-border 480 contractors/340 industrial:

75% SMEs and mid-caps, 50% users, 65% new in EU R&I Programmes

29 Members States + Ass. Countries

Factories of the Future PPP

Example: FORTISSIMO

• Goal: Provide Manufacturing SMEs with easy and cost-effective access to advanced simulation, visualisation, data analytics, and artificial intelligence

• How: provide expertise, tools and means to tap into a European Cloud of HPC resources & software applications

• 16 innovation hubs – 94 experiments so far

• Fortissimo 1+2: €26m >100 SMEs

Featured in Sueddeutsche Zeitung 08.12.2016http://www.sueddeutsche.de/digital/supercomputer-fuer-den-mittelstand-

mal-eben-durchgerechnet-1.3282255

Example

Cloud-based CFD simulation for hypercars

• CFD aerodynamics simulation needed - but in house HPC resources not affordableSolution: Cloud-based pay-per-use HPC

• Impressive results• 30% saving in design costs plus 50%

reduction in wind tunnel and physical testing• Development savings of €90K per year• 30% decrease in time to market

• 250k€ Funding 4M€ benefit to company

over 5 years using cloud-based Pay-per-use HPC and simulation software

Partners:End-user SME: KOENIGSEGG – SEISV-SME: ICONCFD – UKHPC centre: CINECA – ITHPC centre: EPCC - UK

Example

The footwear industry ecosystem in PT Norte

• Successful industry in PT: 40% growth/4 years, 90% export• Experiment

• Improving all processes involved in footwear production by use of CPS and IoT solutions(platforms: OpenIoT, FITMAN)

• Expanding the ecosystem to other- footwear SMEs (also outside PT Norte) - and other sectors (e.g. furniture) 6-8 replication experiments (2 years)

Partners:End-user SMEs: KYAIA (600workers) - PTTechnology providers: INESC Porto – PT,

Centro Tecnologico do Calcado de PTSupported by European FITMAN ecosystem

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Strengthening leadership in key parts of the digital value chain:

Leadership in digital industrial value chains

• Alignment / federation of EU-wide R&I effort, national initiatives and industrial strategies

• Focus investments on • Key technologies and their integration across all sectors• Digital industrial platforms, reference architectures, interoperability frameworks, … leading to

EU-driven standards• Development environments: reference implementations and experimentation environments in

real setting

• Focus on a small number of strategic and ambitious large scale federating initiatives at European scale, which• pool resources across the EU, Member States, Regions, Industry• support bottom-up standardisation through platform building and large scale experimentation

and piloting • use the framework of the EU PPPs, the ECSEL JU and the Focus Areas as the linking pin

(H2020 Work Programme 2018-20, ECSEL)17

Smart Connected Factory Platforms

DRAFT 18

Applications

Platform / Operating

System

Sensors / Connection withphysical world

Industry–driven platforms related to Manufacturing

IDSRAMI

Community-ledcross-sector(horizontal)

Community-ledsector-specific

(vertical)

Commercialwith open interfaces

FITMAN

conc

eptu

alim

plem

enta

tion

Starting point: EFFRA Recommendations

EFFRA Recommendations: Factories 4.0 and Beyond (Sept 2016)

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Towards interoperable digital platforms in the domains of strategic European interest

Key objectives• Future global standards & platforms driven by interests of EU actors• EU actors join forces along common interests ("platform economy")

Approach: Bottom-up standardisation & platforms (TRL 5-8)• Ref. architectures, platforms, interoperability frameworks• Testbeds + large scale/system level experimentation• Standardisation & ecosystem building

Scope • Addressing the domain challenges of the future

• Profiting from digital advances (AI, analytics, IoT, …)• Building on existing platforms/ref architectures• Balancing the interest of EU industrial actors

• Large – Small, users – providers, industrial – societal • Focus on basic concept / grand challenges:

• Digital twin – digital threats

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Strengthening leadership in key parts of the digital value chain:

Data Economy

The digital revolution is built on data

6 million people employed

7.4 million people employed

Most economic activity will depend on data within a decadePotential of the data-driven economy

Building a European Data Economy

Who owns industrial data?

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Machine provider

Factory owner

Network provider

Guiding principles:

• Enable the trading of machine-generated data

• Facilitate and incentivise the sharing of such data

• Protect investments and assets• Avoid disclosure of sensitive and

confidential data• Minimise lock-in effects

• Communication on Building a European Data Economy launched on 10 January 2017

• Start of a broad consultation process to which all relevant stakeholders are to be invited (10 January – 26 April 2017)

Possible mitigation measures:

• Guidance on incentivising businesses to share data

• Fostering the development of Application Programming Interfaces

• Default contract rules• Access for public interest purposes • Access against remuneration

Baseline: General Data Protection Regulation (GDPR - 27 April 2016): Focus on personal data

Data EconomyAddressing current barriers

DRAFT 25

2. Data access and transfer

Making machine-generated data more accessible for businesses to boost innovation and the digital economy

1. Free Flow of Data

Removing data localisation restrictions except if they are required for national security and similar objectives

3. Data portability, interoperability and standards

4. Liability in the context of IoT and autonomous systems

5. Experimentation and testing

The cyberspace is a backbone of digital society & economic growth but cybersecurity incidents are

increasing at an alarming pace

26…as well as financial theft, loss of intellectual property, data breaches, etc.

The EU's response

• 2013: The European Strategy on Cybersecurity sent out the strong message thatcybersecurity is a global issue.

• 2016: Directive on security of Network and Information Systems (NIS) is the first comprehensiveEU legislation and a fundamental building block in cybersecurirty

• 2016: cPPP to ensure a sustained supply of innovative cybersecurity products and servicesin Europe

• 2016: Communication on Strengthening Europe's Cyber Resilience System includes initiatives(e.g. certification) to increase cyber resilience, stimulate cybersecurity market, mainstreamcybersecurity in EU policies.

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Towards a European ICT security certification framework :

The EU's commitments

• Certification can play an important role in increasing trust and security in ICT products and services

• In the July Communication the Commission has committed to:

• Develop a proposal for a possible European ICT security certification framework covering products and services

• Include, where appropriate, the integration of ICT security certification in future sector-specificlegislative proposals

• Assess the feasibility and impact of a European cybersecurity labelling framework. 28

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Strengthening leadership in key parts of the digital value chain:

Digitisation is transforming the economy

New Digital Skills and Jobs Coalition – launched 1 Dec 2016

• Builds upon & expands Grand Coalition for digital skills and jobs (2013)• Implements part of the New Skills Agenda for Europe (June 2016)• What's new:

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Broadening the scope to the workforce as all sectors of the economy become digital. Roundtable with social partners1st step

Involve Member States and stakeholders in designing and delivering solutions: national digital skills strategies and national coalitions by 2017, joint targets by end of 2016

Best-practice exchange; pledges and joint training programmes; link to Member States’ action

Better use of European and national funds

Final Remark

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• Digitalisation increasingly perceived as a threat with potentially negative consequences for the labour market and income inequality

• Eurobarometer survey from 2014 found that 70% of EU citizens think that robots steal jobs

• No clear empirical evidence: some studies find negative effects, other are neutral/positive

Taking the concerns of citizens seriously:Continued monitoring of effects of digitalisation on the ground

THANK YOU

Digitising European Industryhttp://ec.europa.eu/digital-agenda/en/digitising-european-industry

Twitter: #DigitiseEU

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